Although no federal tax credit in effect covers solar energy usage, homeowners can claim the Residential Renewable Energy Tax Credit if they install a solar water heating system or a solar-electric system on residential property as of 2015, as stated by Energy.gov. The credit covers 30 percent of installation expenditures.
Although the home with a solar energy system does not need to be the person's principal residence for the credit to take effect, the individual must be the legal property owner, according to Energy.gov. No maximum credit exists for solar-energy systems and solar water heating systems installed after 2008, and all systems must have been placed into service after 2006 to qualify. Qualified expenditures covered by the credit include wiring and piping costs, labor costs and assembly expenses. The credit does not apply to solar systems used to heat hot tubs and pools, and a solar water heating system must heat at least half of the water used on the property to qualify.
The Residential Renewable Energy Tax Credit has been active since 2005 as part of The Energy Policy Act and was scheduled to terminate in 2016, according to Energy.gov. In addition to solar energy, the credit also applies to geothermal heating, fuel cells and wind energy.